The foreign exchange reserves of the National Bank of Romania (BNR) decreased by €1.22bn in February, compared to January, to €41.8bn, after €3.22bn entered the central bank's vaults during the month and €4. 45bn was used for various purposes.

The decline was apparently caused by the Resilience Facility funds flowing to the accounts of the Ministry of Finance, but the central bank’s low tolerance to currency depreciation may increase the cost of the market interventions on the forex reserves as well.

In January, the reserves had increased by €2.6bn driven by the €2.1bn explained by the net proceeds from the two Eurobonds issued during the month.

In December and January, the European Union transferred to the BNR accounts under the Resilience Facility €1.84bn and €1.84bn respectively, but this money is supposed to be transferred to the Ministry of Finance.

In February, the finance ministry used $2.08bn of its reserves held at the central bank to repay a Eurobond that matured.

On the upside, Romania issued in February Eurobonds for the second time this year, raising €2.5bn with two issues of €1.25bn each, meaning that overall the flows generated by Eurobond operations should have been positive.

The negative balance of flows in February most likely reflects Resilience Facility funds being transferred from the BNR to the finance ministry.

Forex market interventions cannot be ruled out towards the end of the month particularly.

The 103.6 tonnes of gold reserves at the BNR were valued at the end of the month at €5.67bn.

This puts Romania's international reserves (currencies plus gold) at €47.5bn, compared to €48.4bn at the end of January.

Payments due in March 2022 on account of public debt denominated in foreign currency, direct or guaranteed by the Ministry of Finance, amount to about €111mn.